Japan's trade deficit swung to a surplus

Workers
load a container onto a truck at a port in Tokyo April 18,
2013.REUTERS/Issei
Kato

Japan’s trade balance swung back to surplus in September, thanks
in part to better performance from exports.

According to Japan’s Ministry of Finance (MOF), a trade surplus
of 498.3 billion yen was recorded, higher than the 341.8 billion
figure expected and a sharp turnaround from the 18.7 billion yen
deficit previously reported in August.

The larger-than-expected surplus was helped in part by an
improvement in exports, although they still remained down on the
levels of a year ago in yen-denominated terms.

From September 2015, the value of exports fell by 6.9%, smaller
than the 9.6% drop seen in August and forecasts for a decline of
10.4%.

It was the smallest year-on-year fall since March.

Despite the improvement registered in September, it was still the
12th month in a row that an annual decline had been reported,
something that has been impacted by the twin headwinds of tepid
global demand and significant strengthening in the Japanese yen.

This year alone the yen has risen by close to 16% against the US
dollar.

The MOF reports that the value of exports to the US fell by 8.7%
over the year, mirroring a similar decline to Asia which slid by
8.4%.

The value of exports to China — Japan’s largest trade partner —
fell by a larger 10.6%, while those to the European Union rose by
0.3%.

Business Insider Australia

On the other side of the trade ledger, the value of imports
tumbled by 16.3%, although this too was an improvement on the
17.3% drop seen in August. It also topped forecasts for a decline
of 16.6%.

Still, like the export figure, the value of imports has now
logged a year-on-year decline in each of the past 21 months,
dating back to December 2014.

Writing before the release of today’s data, the pair said that
export and import growth rates should remain “deeply in the red
as the stronger exchange rate has reduced the yen-value of
shipments”, according to Bloomberg.